Sevilla v.

CA, April 16, 1988 ESTRELLADO

FACTS: Tourist World Service Inc. (TWS) leased the premises belonging to Mrs. Segundina Noguera for
the fRUPeU·V use as a branch office where both parties entered into a contract. Lina Sevilla bound
herself solidarily liable with TWS for the prompt payment of the monthly rentals thereon. When the
branch office was opened, it was run by appellant Sevilla payable to TWS by any airline for any fare
brought in on the efforts of Sevilla, a commission was agreed upon where 4% was to go to Sevilla and
3% was to be withHELD by TWS for the sale of airline tickets. However, TWS have been informed that
Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was
anyhow losing, the TWS considered closing down its office. Two resolutions of the TWS board of
directors were passed to abolish the office of the manager and vice president of the branch office and
authorizing 9 of 231 the corporate secretary to receive the properties in the said branch office.
Subsequently, the corporate secretary went to the branch office, and finding the premises locked and
being unable to contact Sevilla, padlocked the premises to protect the interests of TWS. When neither
Sevilla nor her employees could enterthe locked premises, she filed a complaint against TWS with a
prayer for the issuance of a mandatory preliminary injunction. The trial court dismissed the case holding
that TWS, being the true lessee, was within its prerogative to terminate the lease and padlock the
premises. It likewise found that Sevilla was a mere employee of TWS and as such, was bound by the acts
of her employer. The CA affirmed. Hence this petition. ISSUE: Whether there is an employeremployee
relationship between TWS and Sevilla. HELD: NO. There was no employer-employee relationship but
rather a principal-agent relationship. The records show that petitioner, Sevilla, was not subject to
control by the private respondent TWS which is a substantial element in establishing an EE Relationship.
Under the contract of lease, she had bound herself in solidum for rental payments, an arrangement that
would belie claims of a master-servant relationship. That does not make her an employee of TWS, since
a true employee cannot be made to part with his own money in pursuance of his ePSOR\eU·V business,
or otherwise, assume any liability thereof. Secondly, when the branch office was opened, the same was
run by the appellant Sevilla payable to TWS by any airline for any fare brought in on the effort of Sevilla.
Thus, it cannot be said that Sevilla was under the control of TWS. Sevilla in pursuing the business, relied
on her own capabilities. It is further admitted that Sevilla was not in the cRPSaQ\·V payroll. For her
efforts, she retained 4% in commissions from airline bookings, the remaining 3% going to TWS. Unlike an
employee, who earns a fixed salary, she earned compensation in fluctuating amount depending on her
booking successes. The fact that Sevilla had been designated ´bUaQcK PaQaJeUµ does not make her a
TWS employee. It appears that Sevilla is a bona fide travel agent herself, and she acquired an interest in
the business entrusted to her. She also had assumed personal obligation for the operation thereof,
holding herself solidary liable for the payment of rentals. Wherefore, TWS and Canilao are jointly and
severally liable to indemnify the petitioner, Sevilla.